My “it’s better than the Street thinks” call on Fifth Third (FITB) has continued to work since my last article, with the shares up more than 20%, almost doubling the return of the regional bank index over that time. Fifth Third has been outperforming on a pre-provision basis and loan growth is starting to move in a better direction as management positions the bank for higher rates.
Given the strong move in the shares over the last year, I don’t think the “Fifth Third doesn’t get enough respect” thesis is all that valid anymore. Now the question is whether the company’s efforts to shift to a better, more consistent, growth trajectory will work and whether the company can and will generate better-than-average ROE and ROTCE in the coming years – something that has been an issue for the bank in the past.
I’m not fully sold that Fifth Third will be one of the big winners in its push into the Southeast, if only because there’s so much competition there, but I do still see mid-single-digit core earnings growth. I’m hesitant to say that Fifth Third can’t continue to outperform, but I don’t think it’s quite the buy call it was six or 12 months ago.
Read more here:
Fifth Third Ready To Flip The Switch On Growth, When The Yield Curve Cooperates
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